Tuesday, February 27, 2007

AdAge is running a good article on the "death of the Starbucks brand experience," citing a recent trend from inside the company (in fact spurred on by chairman Howard Schultz, as noted by a leaked memo picked up by Starbucks Gossip last week) of cutting costs and improving efficiency at the expense of the brand's experiential qualities. For example, the article cites things like delivering vacuum-sealed ground coffee to stores across the nation (as opposed to having them grind their own beans), and using pre-measured espresso "capsules" instead of having barristas pull shots as examples of the way Starbucks has been commoditizing the brand experience in order to keep up its growth rate. The problem in both of these cases is that by reducing the authenticity of the environment and the personalization of service, Starbucks is relegating themselves to acting as a glorified coffee (and CD, and scone and breakfast sandwich) vending machine, losing some of its homey ambiance in the process. Combined with the fact that they were found to have some of the worst-tasting coffee according to a recent Consumer Reports study, that equals a big problem. The most interesting quote from the article is this gem, which definitely sheds some light on the company's changing focus:

"You probably wouldn't leave a Starbucks dissatisfied, but satisfaction is just the price of entry. It has lost its differentiation, its crispness of experience."

In an age where a leaked memo could be a PR ploy as much as it could be a simple oversight, a quote like that could indicate a genuine interest in becoming remarkable again, or it could simply be motivational rhetoric. As one of those coffee snobs who scoffs at Starbucks, I can't say I have a big emotional investment either way, however Starbucks has been one of the standard examples of how to do brand experience right for over a decade now. Watching such a giant stumble but recover would certainly be educational for anybody interested in improving the in-store experience of their venues.

The combined company should be able to give the recently-created Nielsen In-Store a run for its money, and it certainly looks like the retail media measurement market will continue to be a hot segment through 2007. Part of the excitement comes from the In-Store Marketing Institute's PRISM measurement initiative, the first data from which we should be seeing shortly.

Since measurement is always the subject of great debate, multiple large companies have the opportunity to establish themselves as mindshare leaders, so TNS's acquisition of widely-respected Sorensen makes a lot of sense. Given that more established players means more ways to determine the efficacy of any one of the players, I certainly hope that the newly combined TNS/Sorensen can give VNU's Nielsen In-Store a run for its money.

A key finding of the survey was that 66 percent of store visits this holiday season were not influenced by advertising and marketing. Mr. Conroy said this is consistent with previous studies and shows that, to win shoppers, retailers need to deliver consistent shopping experiences and fulfill brand promises. In other words, previous shopping experiences are more important than advertising messages.

Apparently, in an effort to save time and make shopping more efficient, more people are engaging in so-called pre-shopping techniques, like searching for a product or store information online before actually visiting the store. In fact, 61% if those surveyed by Deloitte did this kind of thing, which obviously means that push-based advertising and marketing takes a back seat to research (to some extent) in these cases.

The point that McClain raises at the end of this is whether retailers would be willing to take some portion of their traditional advertising budget and spend it more on cultivating customer relationships and improving the in-store experience. Obviously most retailers are hesitant to make "cuts" in t heir marketing budgets, but I think in this case most would need to be convinced that it would be more of a reordering of marketing priorities, and re-purposing of funds, maybe even by adding some portion of the new customer service and CRM initiatives into the marketing budget.

We've heard lots of stories before about shopping being an experience, a destination or a pastime. But the research presented by Deloitte suggests that some times, a shopping trip is more like a job or a task, where some analytical research at the beginning of the process can yield better results (in terms of total time and money spent), without much of an emotional appeal during the pre-shopping process (which, since it limits the amount of "actual" shopping time, also reduces the emotional component of the shopping trip itself).

I'm still of the opinion that most shopping trips can be broken down into one of these two categories (e.g. either "pastime" or "task"), however it also seems likely that elements of one can seep into the other. For example, shopping for a high-def TV, something that can only really be considered a non-essential luxury item, is going to have some emotional toll. Shoppers will visit one or more stores not just to look at different screens and check prices, but also to pick the brains of store employees, check out any necessary accessories, etc. Considering how big of a purchase it is, though, those same people will go home and do research on line, looking at customer reviews and competitor pricing before making a purchase decision. In this case, the "shopping" portion of the purchase process is still largely experience-driven. The "buying" portion, however, is more analytical in nature, and is thus more prone to the effects of pre-shopping (and maybe even post-shopping) research.

Tuesday, February 13, 2007

Hot on the heels of the news that cinema advertising company National CineMedia successfully completed its IPO comes this report from the Wise Marketer suggesting that the very type of ads the firm sells have been found to induce the emotional buying effect and create strong viewer involvement. The survey, conducted by ad research firm Ipsos ASI on behalf of cinema advertising firm Screenvision, was conducted in France and Spain to try and determine the power of emotions in cinema ad campaigns. The article notes:

It shows that the viewers are emotionally touched by the screen campaigns, which generate significant public involvement and strong positive emotions.

In association with TV campaigns, screen advertising increases the quality and the impact of ad messages, reinforcing the viewers' will to purchase. The survey results show the relationship between emotions generated by screen advertising and the quality of the response to the advertisement.....

The survey was conducted among a representative population sample aged 15-60. It compared the responses of heavy cinema viewers who have watched a specific ad on screen in a cinema during the previous seven days with the responses of those who had seen the ad on TV only.

In both countries, heavy cinemagoers who had seen the cinema ad expressed fewer negative and passive feelings about the ad than those who had only seen it only on TV. In France, heavy cinemagoers felt 20% fewer negative and passive emotions than TV-only viewers. Positive and active emotions were 39% higher for heavy cinemagoers than for than for less frequent cinemagoers.

While Screenvision supplies both on-screen and off-screen advertising media for movie theaters, it sounds like this study primarily focused on the digital signage-like element where full-motion video (perhaps simply television commercials) are displayed on-screen before the movie begins. Using the same content would have allowed Ipsos ASI to determine what kind of effect the media had in the cinema versus only on TV.

Thursday, February 08, 2007

There's a good post (and even better comments) at Adaptive Path focusing on the difference between experience design and brand experience, and why so many people relate the two (when, the author suggests, they don't have anything to do with each other). The main thrust of his argument is basically that the word brand, "will always be about the impression companies want to make, and are by their nature an 'inside-out' proposition — a company figures out its brand and what it means, and does what it can to communicate or otherwise impart that message to people. Brand always starts with the company." On the other hand, "experience... needs to be about the people. What do they want to accomplish, achieve, do? For experience to succeed, it must start with the person, and from there, impress upon the company. 'Experience' is outside-in."

The inside-out versus outside-in concept fits well with my own attempts to figure out why retail marketers do the things that they do. For private label companies, the brand is everything: it's the stores, it's the people, it's the merchandise. But as the Adaptive Path post suggests, focusing on the brand would yield a totally "outside-in" approach, which wouldn't produce a very good experience for the average customer. It might be attractive, visually appealing, and so on, but wouldn't do a very good job of focusing on the customer's needs.

On the other hand, retailers that sell merchandise from multiple brands have a different problem, since they have to balance their own brand with the brands of all of their suppliers. The best retailers recognize the problem and try to adopt the "outside-in" experience approach that the article talks about, realizing that otherwise, they'd just be competing for attention with all of the "inside-out" branded goods.

How these realizations translate into actual design elements and innovations is different for every retailer (or at least that would explain how multiple retailers in the same category can have vastly different but still generate pretty good experiences).

Minority Report lovers, rejoice! Soon all of the technology that you swoon over and refer to incessantly will be a reality, at least according to this article in LiveScience referring to a more advanced kind of optical iris scanning. According to the article:

A public iris scanning device has been proposed in a patent from Samoff Labs in New Jersey. The device is able to scan the iris of the eye without the knowledge or consent of the person being scanned. The device uses multiple cameras, and then combines images to create a single scan.Iris recognition is a biometric identification system that requires a high-resolution picture of the irides of the subject's eye. Pattern recognition software is then used to match that picture against future iris scans.

Of course, that's a big problem -- right now, just for privacy advocates, but eventually it will become obvious that maybe it's not such a good idea to be immediately recognized and have your every movement logged. Granted, there's a long way from filing a patent application to actually having a commercially available product that does what it's supposed to, but apparently a similar system has already been tested with a reasonable amount of success, and given the variety of lucrative uses and abuses that such a system will allow, there's no doubt that it will continue to be refined.

Monday, February 05, 2007

IGD just published another report on the state of shopping, and according to this summary at RetailBulletin, more shoppers are engaging in "selective shopping" techniques to cut down the amount of time they spend in stores. The authors cite increased time pressures as the primary driver for this kind of behavior, so it would seem like the greatest implications would be in grocery and dry goods stores, where most of the shopping is out of necessity, and not necessarily for entertainment purposes. Some of the other key takeaway points:

35% of shoppers visit only the aisles which they believe have the items they need, compared with 30% in 2003

25% of shoppers were willing to follow the in-store layout along each aisle, down from 28% in 2003

4% of shoppers take a haphazard approach and wander round aisles at random. This was up from 8% in 2003

25% are guided, and visit each aisle, regardless of whether they needed anything.

28% took this approach in 2003

35% are selective shoppers and only visit the aisles which they believe have the items they need. The figure in 2003 was 30%

26% are systematic, and follow the pattern of the aisles, unless they know the aisle contains nothing they need. 34% took this approach in 2003

The report's author, Julie Starck, a Senior Business Analyst at IGD, made the interesting conclusion that, "these findings challenge the traditional perception that shoppers can be 'pushed' into seeing new products as they wander round the store. Many consumers will simply not see new products unless they are in aisles which are already on their mental map of their in-store journey."

Aside from locating new products or promoted items in key locations where simple math dictates that increased foot traffic will yield increased product exposures, these numbers also illustrate the importance that store layout, product packaging and retail media systems can have as shoppers become more focused on getting in and out of the store quickly.